LATAM Airlines Group News: LTM Stock Flies 30% on Delta Stake

DAL is taking a 20% stake in LTM

LATAM Airlines Group (NYSE:LTM) is seeing LTM stock surge on Friday following news of a deal with Delta Air Lines (NYSE:DAL).

LATAM Airlines Group News: LTM Stock Flies 30% on Delta Stake
Source: Tobias Arhelger /

This LATAM Airlines Group news includes Delta Air Lines taking out a 20% stake in the company. This will have it paying $16 per share for the stake in LTM stock, which has a total price of $1.90 billion.

The deal between LATAM Airlines Group and Delta Air Lines doesn’t just stop at that initial investment. DAL will also be investing $350 million into LTM to help establish a strategic partnership between the two companies.

“This alliance with Delta strengthens our company and enhances our leadership in Latin America by providing the best connectivity through our highly complementary route networks,” Enrique Cueto Plaza, CEO of LTM, says in the LATAM Airlines Group news release.

LATAM Airlines Group notes that it is expecting to see several benefits from its partnership with Delta Air Lines. This includes an improvement to free cash flow generation, a forcasted debt reduction of $2.00 billion by 2025 and enhancing its ability to execute its long-term strategy.

Delta Air Lines is also expecting benefits from the deal with LATAM Airlines Group. That includes it being accretive to EPS over the next couple of years. At the same time, DAL isn’t expecting this to hamper its free cash flow and shareholder returns.

LTM stock was up 30%  and DAL stock was down 1% as of Friday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.

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